A resounding victory by the Republicans in the 2014 mid-term elections wasn’t that surprising given the historical precedents and the increasing unpopularity of the sitting president. And the results of referendums about gaming issues also wasn’t a shock but they cleared up much uncertainty in those states and in the industry in general. Maybe the two most important elections were held in Massachusetts and California, where different results would have only added to the uncertainty. So starting with those two states, here’s GGB News Election 2014 Gaming Wrap Up.
Message in Massachusetts
The voters of Massachusetts spoke loud and clear on election night, voting 60 percent to 40 percent to retain casino gaming in the state. They voted against Question 3, which would have repealed the 2011 Expanded Gaming Act.
Some people were confused about the law since if voters had approved of Question 3 it would have been the end of casinos, but when they voted against it, they were voting for casinos. Nevertheless, enough voters understand that the measure was defeated resoundingly.
For several weeks polls had indicated that Question 3’s odds of passage were lengthening, with a poll by Suffolk University showing that only 34 percent of those surveyed supported it, with 59 percent saying no, which is about the way the vote turned out.
Most of the state’s clergy were solidly behind Question 3, including all of the Catholic dioceses and the Latino Clergy Coalition of Western Massachusetts, which held rallies in Springfield near where the MGM casino is planned. Others in the coalition were the Brockton Interfaith Community, Faith for Repeal, and representatives of the Episcopal, Greek Orthodox, and Jewish and Islamic faiths.
The Massachusetts Catholic Conference urged pastors to remind parishioners to vote and of the “deleterious effects of predatory casino gambling.” The Catholic Church limited its activities to speaking, and did not raise much in the way of money. One of its arguments was that crime would increase as a result of more gambling. Another issue was the evils associated with gambling addiction.
The Rev. Laura Everett, director of the Massachusetts Council of Churches, declared, “They’re not saying it’s a sin to gamble. What I hear religious folks saying on this is, ‘There will be people hurt by this even if they never set foot into a casino — children of people who are addicted to gambling, the small-restaurant owner who can’t compete with the $4.99 all-you-can-eat buffet.’”
The influence of pastors was considered a big factor in the defeat of the Suffolk Downs casino proposal in Boston last year.
Although polls never showed the Yes on Question 3 percentages even close to a majority, the various casino developers involved didn’t take any chances. Penn National, for example, contributed $3.2 overall to help protect its Plainridge Park Racecourse. MGM Resorts, which bitterly fought Penn for the rights to the Springfield license, was happy to donate $2.5 million to the common cause. Towards the end of the campaign Wynn Resorts, awarded the Boston metro license in September, donated $1 million to the campaign.
Overall the pro-casino Coalition to Protect Jobs and other organizations raised $14 million, compared to $436,000 for Repeal the Casino Deal. Unlike many states, Massachusetts has no limits on how much individuals or corporations can donate to fight or support an initiative.
Most of the state’s highest-ranking officials, including Governor Deval Patrick and House Speaker Robert DeLeo, opposed Question 3. Incoming Governor Charlie Baker, and his defeated opponent Martha Coakley, also opposed it. The exception was U.S. Senator Elizabeth Warren, who supported it. The Boston Globe endorsed the initiative.
Now that the voters have spoken, the path is cleared is three casino resorts and a slots parlor in the Bay State.
These include an $800 million casino resort to be built by MGM Resorts International in downtown Springfield; Wynn Resorts’ $1.6 billion casino resort along the Mystic River in Everett, a $225 million slots parlor already half completed in Plainville by Penn National Gaming. The Massachusetts Gaming Commission has yet to award a license for the southeastern part of the state, purportedly reserved for a tribal casino.
Although Springfield had its share of anti-casino activists, a solid majority bought the argument that the casino that would be built in the part of the city devastated June of 2011 by a freak tornado would create jobs, jumpstart the local economy and help combat one of the highest unemployment rates in the state.
The MGM casino, entertainment and retail complex of 850,000 square feet will be built on 14.5 acres. When completed it will support 3,000 jobs, 2,200 of them full time or the equivalent. The great majority will be union jobs, which is unsurprising considering the high level of support that trade unions in the state have given to gaming expansion.
The casino will have about 3,000 slots and 75 gaming tables. The 25-story hotel will have 250 rooms. There will also be retail and dining, convention space and 54 apartments.
The city of Springfield will be paid a one-time fee of $15 million plus $25 million once the facility is operating. Nearby communities will be paid a total of $2 million up front and $1.5 million annually.
Before the election Springfield Mayor Domenic Sarno had spoken about the gambling money that was hemorrhaging to other states. “You’re losing a billion dollars a year,” he said.
Three days before the election MGM Springfield President Mike Mathis told reporters, “It’s not just about a casino. Two-thirds of our positions are going to be non-casino positions. That’s hotel front desk clerks, that’s guest room attendants, that’s retail associates, that’s people that work in the movie theater and the bowling alley. So to put us in a box and say we’re a casino really misses the point about where this industry is going.”
Before the vote Mathis and Repeal the Casino Deal’s representative Al Cabot engaged in a no holds barred debate over the issue
After the vote was tallied MGM Resorts Chairman Jim Murren declared, “Today’s vote showed us that people really understood what was at stake” and added that MGM and Springfield, “can now begin the work of rebuilding a great downtown and igniting a renaissance in Western Massachusetts.”
Mathis promised to begin construction once Question 3 was settled. The gaming commission postponed the official awarding of the license to MGM so it would not have to pay the license fee until after Question 3 was decided. Construction is expected to take about two and a half years, with a projected opening in 2017. He also promised to pay the $85 million license fee on November 17 now that Question 3 has been voted down.
During the election campaign Wynn went forward with beginning the hazardous waste clean up of the 30-acre former Monsanto chemical plant site and with the redesign of the 27-story casino hotel that the gaming commission attached as a condition for the license. This will cost an estimated $30 million. Construction of the resort and casino is expected to take at least two years, with a possible opening of late 2017. The casino will have 3,200 slots, 160 gaming tables, dining, retail stores, convention and meeting space. It will employ 4,000 during construction and 4,000 permanent workers. The gaming commission officially awarded the license to Wynn last week and Wynn followed this up with an $85 million payment of the license fee.
Plainridge Park, which will now be able to finish construction, will have 1,250 slots and harness racing. At the same time, employees of the harness racing industry will be able to keep on working, with a little support from those slots. Penn said it hopes to open the slots parlor by next June.
Plainville is plainly a company town, where 80 percent of voters voted against Question 3. One of those residents, Dale Bergevine, told the Sun Chronicle, “This was about the tax revenue and jobs, jobs, jobs,” Bergevine said. “We have been waiting for this for years.”
Indian casinos in Connecticut had no doubt rooted for Question 3, which would have removed major competition. But, according to Mitchell Etess, chief executive officer of the Mohegan Sun, that casino resort has been planning for the eventuality of Massachusetts’s casinos for years.
“We’ve looked at pursuing other projects in the Catskills and Philadelphia, for example, and we’ve looked at how to make this property (Mohegan Sun in Uncasville) more competitive,” he told the Day. At the same time his company reportedly has also been pursuing a license in the Bay State, including, most recently, a possible casino in New Bedford, in the southeastern casino zone. However, Etess was cagey about that. “We haven’t thought about that at all,” he said.
Mohegan archrival Foxwoods has also expressed an interest in a casino in Fall River. Other potential developers have highlighted New Bedford and Bridgewater as possible sites. None have so far gone so far as to contact those communities to arrange for host community elections.
The current deadline for bidding for the southeastern license of December 1 was extended by two months by the commission, with a hoped for license award date of around August of next year.
The early favorite for a southeastern license was the Mashpee Wampanoag tribe, which wants to build the $500 million First Light Resort and Casino on 150 acres in Taunton. It is waiting for the Bureau of Indian Affairs to put its land into trust. This has not happened yet, and many opponents of an Indian casino in Taunton say it never will. In extending the deadline, panelists noted that commercial bidders have been reluctant to enter the competition because of the uncertainty connected with the Mashpees’ application.
Voters who relied on statistics about the effects of gaming were often hard-pressed to find unbiased research. Critics of the studies that are produced say they were often the products of researchers in bed with the gaming industry.
Unlike research on tobacco and alcohol, which have largely been independent of the industries they study for years, many researchers on gaming rely on funds from the industry.
Critics say that studies frequently emphasize the small percentages of the population who have gambling additions, while ignoring the actual real numbers. This, they say, tends to downplay the problem, especially the claims that the casino industry gets high percentages of its profits from problem gamblers.
According to the Ontario Problem Gambling Research Centre, “We cannot trust gambling research. We must therefore be skeptics. Every expert invited to give evidence to a committee on gambling should be asked, ‘Have you ever accepted money from the industry to conduct a piece of research, write a paper or attend a conference?’ ”
Prop. 48 In California
California voters soundly defeated Proposition 48, which would have allowed the North Fork Rancheria Band of Mono Indians (North Fork Tribe) to build an off-reservation casino in California’s Central Valley, 40 miles from its traditional homeland. With more than 4 million votes cast, no votes had about 61 percent, compared to 39 percent for yes votes.
Opponents of off-reservation casinos, which they call “reservation shopping” focused all of their opposition to that practice on Proposition 48, which was largely funded by gaming interests who felt threatened by the competition posed by an Indian casino near the freeway that bisects the San Joaquin Valley.
Proposition 48 would have approved of a tribal state gaming compact signed by Governor Jerry Brown in 2013 and ratified by the legislature. It would have also ratified a compact with the Wiyot Tribe, which in return for promising not to build a casino was allocated a portion of the North Fork Tribe’s gaming revenue.
Major funding for the opposition to the measure came gaming tribes with large dominant casinos, which between them raised $16 million, compared to $400,000 raised by supporters of Prop. 48, most of it from the North Fork Tribe’s casino partner, Station Casinos.
Proposition 48 was put on the ballot by opponents of the compact, who called for its defeat, including U.S. Senator Diane Feinstein. She joined those who claimed that the North Fork compact violated California Proposition 1A passed in 1999 that allowed Indian gaming in the state. Those people claim that the amendment to the state constitution stipulated that tribes would confine their casinos to their reservations.
Some contended that Prop 48 was actually a national issue, and Feinstein’s one time ally on this issue, former U.S. Senator Jon Kyl of Arizona once stated, “The Indian Gaming Regulatory Act was originally intended to promote tribal economic development and self-sufficiency—not to enable tribes to become gambling enterprises that constantly expand to new casino locations.”
Feinstein recently declared, “The fact is that some tribes have abused their unique right to operate casinos and have ignored the intent of Congress by taking land into trust miles away from their historical lands. This is done simply to produce the most profitable casino and the greatest number of potential gamblers, often with little regard to the local communities.”
Governor Jerry Brown, the California Democratic Party, the Los Angeles Times and many local leaders in Madera supported the proposition. They claimed that the North Fork casino would create 4,000 jobs and protect pristine lands near the Sierras because the tribe would not be building on its out-of-the-way reservation.
The tribe wants to build a $250 million casino with 2,000 slots and hotel adjacent to Highway 99 near Madera on 305 acres. The vote does nothing to change the land’s status as reservation land. The Bureau of Indian Affairs has ruled that the North Fork Tribe has a historical connection to the land. The vote also does not affect the bureau’s approval of the compact.
Some tribal leaders have voiced defiance about the vote and said that nothing prevents them from building a Class II casino, for which they do not need a compact.
Tribal spokesman Charles Banks-Altekruse declared, “If the voters of California don’t like the agreement our tribe had with the state of California, what’s next is we’ll go back and get another agreement and we’ll build the casino with another compact,” he said. “That’s what I guess the bottom line is.’”
The tribe could also try to negotiate a new compact, although lawmakers are likely to take into account the voters’ feelings on this issue when they vote whether to ratify another one.
Cheryl Schmit, director of Stand Up for California, which gathered the signatures that put the measure on the ballot, alluded to that new political realty. “This vote now puts the ball squarely in the state legislature’s court: They now can make a consistent policy on tribal gaming,” she said.
In Northern California, voters in Milpitas left no doubt on election night that they did not want the Bay 101 Casino to move from San Jose to their community.
Despite the promise of $84.4 million annually in taxes to the city, voters disapproved of the measure by 74.4 percent to 25.6 percent with 5,685 votes cast.
Towards the end of the campaign Mayor Jose “Joe” Esteves, who voted to put the measure on the ballot, announced that he was now opposed to the casino and would work with Milpitas Voters Against Measure E.
“A no on E vote would be a better vote for Milpitas,” Esteves told the Milpitas Post. “I came to this decision early this week.” He said he felt the casino would harm the city’s family values.
He said he switched his vote when the Yes on E campaign used his image on campaign literature without permission.
Rhode Island Rejection
For the second time, voters in Newport, Rhode Island have shot down a proposal to add table games at the Newport Grand. Although statewide voters were in favor of turning the former jai alai fronton into a full casino, local voters blocked the measure by a vote of 4,029 to 3,035.
The outcome could mean that a planned $40 million upgrade will not happen, and the slot parlor will not be sold to an investment group led by former Providence Mayor Joseph R. Paolino Jr. with partners Peter de Savary and Paul Roiff.
But Paolino told the Associated Press he is still interested in the property. “I’m not a quitter and I want to see if we can create jobs and save the jobs that are there,” he said.
Two years ago, statewide voters approved expanding Newport Grand into a full casino. Then as now, local voters shot down the plan.
No Racino in Colorado
In Colorado, Amendment 68, which would have allowed slots at Arapahoe Park horse racetrack in Aurora, was defeated 3-to-1 on November 4. Michele Ames, spokeswoman for No on 68, said the vote was the eighth time in 20 years that a ballot measure failed to expand gambling in the state. Ames added that the outcome indicated Coloradans do not want more gambling beyond the former mining towns of Black Hawk, Central City and Cripple Creek. “We would hope that the folks who run this sort of effort have gotten this message. They like the system they have, and they don’t want one company to have a monopoly,” Ames said.
Twin Rivers Worldwide Holdings Inc., a Rhode Island company that operates Twin Rivers in that state, is the owner of Arapahoe Park, and wrote and funded the campaign for Amendment 68. Coloradans for Better Schools said the 34 percent gaming tax on racino profits would generate $114 million in new revenue annually and create a $418 million economic impact for Colorado.
However, opponents said the Arapahoe Park racino would take business from the three towns that have offered limited gaming in Colorado for 22 years. Casinos there spent about $17 million to defeat the amendment. In addition, school boards and other education organizations did not support the measure.
Twin Rivers officials said they were disappointed in the results. Spokeswoman Monica McCafferty said, “A vigorous campaign was waged on both sides; now Colorado voters have spoken and with their votes have said that they prefer the status quo. Horse racing will continue at Arapahoe Park and the company will continue to be a good neighbor as it always has been.”
Alive in Deadwood
More than 56 percent of those who cast ballots in South Dakota voted to approve Amendment Q, which gives the legislature the authority to allow casinos in historic Deadwood to offer roulette, keno and craps. Currently the casinos only offer slots, poker and blackjack. The amendment also allows the state’s tribal casinos to offer the three new games under federal law.
Supporters of the amendment said the new games will help bring more visitors to Deadwood, where casino revenues have stagnated due to competition in Iowa and Colorado.
Leading up to the election, Mike Rodman, executive director of the Deadwood Gaming Association, said, “Deadwood needs to compete in the global market, but also with the other jurisdictions that have these games. Our customers have increasingly asked for these games. Deadwood gaming has been here for 25 years and it’s going to stay. Given that, we need to make it competitive. Roulette, craps and keno are part of what is expected in most gaming jurisdictions anymore.” Rodman noted Iowa, Colorado, Wyoming, Wisconsin and more than a half-dozen other gaming venues in the U.S. offer roulette, craps and keno, putting Deadwood at a competitive disadvantage.
Rodman said the DGA conducted a “low-key” campaign that included news releases, presentations to state political groups and a “last-minute push” with radio and newspaper advertising, billboards and social media.
Amendment Q opponents said expanded gambling would lead to increased social and economic costs that do not justify the projected revenue increases the new games would generate.
The legislature will consider the proposal when it convenes in January. If lawmakers approve, the new games should be available in Deadwood casinos on July 15 next year, Rodman said.
Florida Fight
Republican Florida Governor Rick Scott spent $100 million on his re-election campaign and beat former governor and Republican Charlie Crist, running as a Democrat. Despite his political liabilities, Scott promoted an improved economy and eked out a 1.4 percentage-point lead over Crist. overcame his own political liabilities and a fierce challenge from Democrat
“It’s time to put all the division behind us and come together. Forget the partisanship. Florida is on a mission—and that is to keep growing. We have made great strides in the past four years, but we cannot rest on our laurels. I will not let up,” Scott said in his victory speech.
Scott’s second term will be helped by the super-majority control Republicans won in the Florida House Republicans, with 17 of Florida’s 27 congressional seats. The party also controls the state Senate.
In his concession speech, Crist congratulated Scott, remarked on finding common ground and asked the governor to expand Medicaid. “As you know for me, it’s never really been right versus left. It’s really been about right versus wrong,” he said.
During the campaign, Crist called Scott a “fraud,” referring to the record-setting Medicare fraud fine paid by Scott’s former hospital company, which he left in 1997. Scott called Crist a “slick politician” and “lousy governor.” In all, Scott spent at least $70 million and Crist spent less than $40 million on TV ads–much of it negative. Scott’s huge fund-raising advantage was the result of being the incumbent, the party’s effective get-out-the-vote effort and Crist’s failure to motivate Democratic South Floridians to turn out like they do for presidential elections. In 2008 and 2012, the state went for President Obama.
The improving economy also benefited Scott, who used the slogan “Let’s Keep Working” along with citing the number of new jobs and the drop in the state unemployment rate.
Crist won the counties in the major media markets of Miami, Palm Beach, Tallahassee and Gainesville. Scott counties in six major media markets, including Crist’s hometown of Tampa, Orlando, Fort Myers, Jacksonville, Pensacola and Panama City.
Soon after Scott’s victory, he said he would reopen discussion on a new compact with the Seminole Tribe. A deal had reportedly been reached between the two parties several months before the election, but had been withdrawn after it was suspected to be a campaign liability for Scott.
Raffles Tennessee
About 70 percent of Tennessee voters approved Amendment 4, which will allow veterans groups to offer charitable gaming fundraisers. The change will correct a 2002 constitutional amendment that many Tennesseans believe was an accident. That amendment, which created a state lottery to benefit college scholarships, stated nonprofit groups categorized as 501(c)(3)s under the U.S. tax code could hold raffles, reverse raffles, cakewalks and cakewheels. Veterans groups, which are 501(c)(19)s, could not.
Some lawmakers said veterans groups purposely were left out—a throwback to a 1980s bingo scandal in which legitimate Tennessee charities were being used to run gambling operations. As a result, the Tennessee Supreme Court ultimately ruled bingo was illegal under the state constitution.
Alabama Status Quo
Republican Governor Robert Bentley won 64 percent of the vote in his re-election bid against Democrat Parker Griffith. “I think obviously the Democratic party is in disarray. I think the people identify more with the beliefs of the Republican party right now. We’re a very conservative state, a very red state,” Bentley said. The campaigns spent a combined total of more than $5 million.
During the campaign, Bentley said starting a state lottery and establishing a gaming compact with the Poarch Band of Creek Indians that could allow more casino-like games on tribal lands are “on the table.” He said while he personally thinks tax revenues from gambling is not a sound way to raise money for the state, which is facing a $230 million budget deficit, he is open to it to possibly generate needed funds. In 2012, the Poarch Creek Indians’ operations made a profit of $332 million.
Also in Alabama, Republican Attorney General Luther Strange won a second term, with 59 percent of voters backing him over Democrat Joe Hubbard, a state representative running for statewide office for the first time. “They saw through all the negativity thrown out in the campaign by the other side,” Strange said. However, throughout the campaign, Strange attacked Hubbard for accepting campaign contributions from the Poarch Band, and tried to tie Hubbard to President Barack Obama over legislative votes on immigration and health care.
Hubbard said Strange is targeting “little old ladies” in bingo parlors instead of violent criminals. He added Strange’s federal lawsuit against the Poarch Band is a waste of time since the federal government regulates Indian gaming. Strange considers the electronic bingo machines at the Poarch Band’s three casinos in Atmore, Wetumpka, and Montgomery to be illegal. He stated the raids and lawsuits indicated he was trying to uphold the “rule of law” in Alabama, but he avoided the issue for the most part.
Strange did succeed in closing down commercial bingo halls across the state, with legal challenges to those actions yet to be decided.
Walker’s Wisconsin
In Wisconsin, 56 percent of voters preferred having Republican Governor Scott Walker remain in office, rather than elect his Democratic challenger Mary Burke. The outcome means Walker remains the final word on the proposed $810 million Menominee Nation off-reservation casino in Kenosha. He has until February 2015 to make a decision—however, with the election over, Walker could decide sooner. The Bureau of Indian Affairs approved the Kenosha casino in August 2013
The win represents Walker’s third statewide victory in four years, fueling speculation that he might seek the Republican nomination for president I 2016. His victory speech focused on America’s strengths as much as Wisconsin’s and included attacks on Washington, D.C. “The folks in Washington like this top-down approach that’s old and artificial and outdated that says the government knows best. We believe that you should build the economy from the ground up that’s new and fresh and organic, and that’s what we’re going to do,” Walker said.
In her concession speech Burke said, “No election outcome or political fight matters as much as the values we hold near and dear. We know we are all better off when everyone in every community across this great state gets a fair shot to get ahead.”
Walker raised more than $25 million for his campaign, and Burke raised $15 million, including $5 of her own money. In September, an analysis by the Wesleyan Media Project indicated the race was the most negative in the country and remained that way through the end.
Walker’s decision regarding the Kenosha casino could impact his political future. If he allows it to move forward, he could take credit for the 10,000-plus direct and indirect jobs the Menominees claim the development will create. The Seminole Tribe’s Hard Rock International will manage the proposed facility.
However, beyond Wisconsin a pro-gambling stance could upset GOP conservatives, even though local business leaders and Republican lawmakers support the casino. Also, a pro-Kenosha decision could infuriate the Forest County Potawatomi Tribe, which is withholding gaming revenues from the state because it fears the state may not be able to pay the millions it would owe the tribe under the state gaming compact. The Potawatomis operate the off-reservation Potawatomi Hotel & Casino in Milwaukee, about 40 miles from Kenosha site.
Analysts give Walker credit for expertly handling the casino issue during the campaign. A poll released in August showed 49 percent of voters statewide favored the proposed casino—and 60 percent favored it in the Milwaukee area, the one place where opposition would have been expected. Also they said Walker made the decision seem more complicated than it actually is. He came up with three criteria for approving the project, including the impossible “tribal consensus.” He also contracted with a law firm specializing in tribal gaming to analyze if the Kenosha casino would add to the economy or cannibalize the Potawatomi’s casino in Milwaukee. That report has not yet been released. In addition, Burke did not exploit the issue; she said she also would have requested an independent analysis, but sooner than Walker did. Outside southeastern Wisconsin it was considered a non-issue.
